Nairobi: The New Kenya Planters Cooperative Union (NKPCU) has unveiled its strategic plan for 2023-2027, with the objective of enhancing coffee production and ensuring the sustained growth of the coffee sub-sector in Kenya. Ministry of Cooperatives and MSME’s Development Cabinet Secretary (CS) Wycliffe Oparanya emphasized the plan’s role as a comprehensive roadmap for fostering a resilient and prosperous coffee industry during the launch event.
According to Kenya News Agency, Oparanya highlighted the coffee industry’s significance to Kenya’s economy, noting its position as a top foreign exchange earner and a critical source of livelihood for many rural households. He reaffirmed the government’s commitment to prioritizing coffee within its Agricultural and Medium, Small and Micro Enterprises (MSMEs) agenda.
Oparanya recognized the vital role of cooperatives in promoting financial inclusion for MSMEs, particularly through resource mobilization for lending and investment. He also pointed out that MSMEs and coo
peratives facilitate the aggregation and marketing of coffee, enhancing the industry’s efficiency.
The CS reported a notable increase in coffee exports, which grew to 47,957 metric tons from 42,858 metric tons in the previous year, reflecting the global demand for Kenyan coffee. The total export value reached USD 252.12 million, showcasing the sector’s economic impact.
On the domestic front, coffee consumption rose by 19 percent, with the expansion of coffee houses from 506 to 79, signaling a burgeoning coffee culture within Kenya. However, there was a six percent decline in clean coffee production, attributed to erratic weather patterns and the natural cyclical nature of coffee production.
Oparanya announced that the area under coffee cultivation has expanded to 111,902 hectares, bolstered by quality seedling programs. He projected an increase in production to 54,800 metric tons for the 2023/24 season, supported by enhanced fertilizer availability and farmer support services.
Despite modest overall growt
h in coffee production, regional challenges persisted, with Africa experiencing a 7.2 percent decline due to unfavorable weather. Nevertheless, Kenya remains the third-largest producer of Arabica coffee in Africa, renowned for its high-quality beans worldwide.
The CS acknowledged ongoing challenges in the coffee sector, including high input costs, shrinking cultivation areas, delayed payments, climate change, market fluctuations, and weak cooperative governance. Outdated legislation has also hindered sector growth, leading to a decrease in production from a peak of 128,000 metric tons in 1989 to 34,500 metric tons in 2020/21.
In response, the government is committed to reforming the coffee, tea, and dairy sectors through policy, legal, and administrative measures. Key reforms include the development of the Coffee policy, Coffee Bill, and Cooperatives Bill 2024, aimed at addressing governance issues and restructuring the Nairobi Coffee Exchange (NCE).
Further reforms include the operationalization of the Di
rect Settlement System (DSS), separating roles within the coffee value chain to enhance transparency, expanding the Coffee Cherry Advance Revolving Fund, increasing farmer payments, and modernizing New KPCU facilities.
Oparanya stressed the importance of adopting technology within cooperatives to improve efficiency and accountability while reducing operational costs. Continuous capacity building and training for cooperative stakeholders are also prioritized to enhance service delivery.
The ministry is collaborating with the Cooperative University of Kenya to develop a syllabus and training manuals for cooperative sector stakeholders. Additionally, the development of a dividend policy aims to prevent cooperatives from borrowing to pay dividends or declaring dividends when facing losses.
Oparanya emphasized the need to preserve the cooperative movement’s focus on service to members rather than profiteering, highlighting governance’s critical role. The ministry is creating a cooperatives guide, akin to the Mw
ongozo code of ethics for state corporations, to serve as a management blueprint for cooperatives.